Fed’s Quarles Makes a Friendly First Impression on Wall Street

Wall Street got a good first impression Tuesday from Randal Quarles, the Federal Reserve’s new chief of bank regulation. In his public debut as the Fed’s vice chairman of supervision, there was plenty of common ground and a lot of smiling, even if Quarles did play it close to the vest in laying out specific plans. The main takeaway from Quarles’ comments at the Clearing House Association’s annual conference in New York: He probably won’t be a prickly, hard-to-please watchdog. That would set him apart from Daniel Tarullo, the former Fed governor who routinely irritated bankers by pushing for tough industry rules after the 2008 financial crisis. While Quarles, 60, demurred on several topics, he did say the Fed will seek outside comment on how to improve the transparency of its annual bank stress tests. And he echoed Wall Street’s long-held view about the so-called leverage ratio, which sets limits on how indebted lenders can be. The industry has argued that the leverage ratio shouldn’t serve as a binding requirement for how much capital banks need, and Quarles said he agreed.